Survey requirements are not consistent. Often, the requirements will vary based on your location and the type of loan that you are applying for. If you intend to build, there are other survey requirements that you may need to address that your lender will not. When you are looking to buy commercial property, it is even less common to have stringent survey requirements. There are various types of surveys, however the most common are boundary surveys and ALTA.
ALTA surveys differ from your typical boundary survey in that they are boundary surveys that require certain standards be met by the American Land Title Association and the American Congress on Surveying and Mapping. The requirements for this type of survey must be met. The person or entity who orders this kind of survey is ordering it based on the combined needs of the purchaser, the lender and the insurer of the title.
ALTA surveys will typically be more expensive because they are more extensive than your average boundary survey. ALTA surveys come with way more detail in regards to the property being surveyed. The kind of information that is covered with this type of survey includes detailed information about boundaries, easements, and improvements. Other features on the property that may affect the ownership will require more research. Information about access to the property, zoning and flooding will also be included in the survey. ALTA surveys are great for purchasing commercial property because of the level of detail that is included.
Lenders will often require this type of survey so that any investments that they are making in the property will be protected in the future. ALTA surveys help lenders evaluate the pros and cons of purchasing a property.
Five Concerns that Lenders Have
When reviewing an ALTA survey, there are five main concerns that they are looking to address during the process. First, the lender will want the surveyor to also write up a legal description of the property to be compared to the legal description in the title. Second, the lender will want to know about any easements to the property. An easement could hinder the property owner from using the land as they had intended, so they are careful to assess this aspect of the survey. Third, the lender will want to know about any violations that have been made on the property in regards to improvements. These will be things that will need to be fixed costing more time and money. Fourth, the lender will want to know if adjacent property encroaches on any part of the property, they are about to invest in. And lastly, the lender can determine how the purchaser will be able to access the property from the ALTA survey.